The economic fallout from the United States and Israel’s war with Iran is rippling across the global economy, heightening recession risks in the US and intensifying strain abroad. The impacts extend across the marketing and commerce landscapes.

In this live FAQ, we’ll track how the latest developments of the conflict play out across companies operating in the Middle East and Asia. Don’t forget to check out our separate FAQs for countries operating in Europe and North America.

Could prolonged conflict trigger a regional recession?

Yes. Disruptions to energy exports, shipping routes, tourism, and air travel are already eroding economic activity at scale, and a prolonged conflict would deepen those losses. Gulf economies are particularly exposed given their reliance on trade flows and hydrocarbons. That’s why Goldman Sachs estimates that Qatar’s and Kuwait’s GDP’s could fall by 14% if the war lasts through April, with the UAE and Saudi Arabia facing contractions of 5% and 3%, respectively.

How is the Iran conflict affecting luxury retail demand?

The conflict is disrupting luxury demand at a critical moment, threatening what had been a fragile recovery and potentially limiting the personal luxury goods market, which we expected to grow 5.5% worldwide this year. In the Middle East, store closures and reduced mobility are directly hitting sales, particularly during Ramadan, a peak shopping period. The region had been a rare bright spot, delivering steady growth as the US and China wobbled.

Luxury demand is heavily tied to tourism, and disruptions to both inbound travel to hubs like Dubai and outbound travel to Europe are weakening cross-border spending, a key sales driver.

If the conflict persists, the risks broaden. Rising oil prices and geopolitical uncertainty are likely to weigh on global consumer sentiment and purchasing power, making luxury purchase deferrals more likely.

How will the conflict affect apparel companies like Shein and Temu?

Rising crude oil prices have pushed up the cost of chemical fibers like polyester and acrylic by more than 10%. Suppliers are adjusting pricing once or twice per day, increasing the margin pressure on manufacturers already stretched thin by tariffs and China’s sluggish economy. Those expenses are being passed onto retailers and are likely to make their way quickly to consumers around the globe.

The war is also disrupting companies’ ability to get products to customers—especially retailers like Shein and Temu that rely heavily on air freight. Apparel orders are piling up in airports across Bangladesh and India due to suspended operations in Dubai and other transit hubs. With few alternatives, companies must either accept skyrocketing air cargo costs—assuming they can secure a spot—or wait for a lull in the conflict.

Are travel and hospitality advertisers pulling back on ad spend?

Airlines are broadly cutting routes, canceling flights, and reducing capacity because of fuel costs and airspace closures. Fewer flights means travel advertisers have far less inventory to sell—which means campaigns are being paused or reduced. Route-specific campaigns like Dubai’s “Beyond Real” ads or Israel’s “Life Worth Living” ad to drive tourism to Tel Aviv are examples of campaigns that are likely to be especially affected.

Hotel demand in affected areas is dropping as bookings are canceled or postponed. For hospitality advertisers, this is likely to translate into shrinking campaign spending or a shift toward discount-led marketing to fill rooms.

Middle East travel is losing an estimated $600 million daily in visitor spending since the conflict began, per The World Travel & Tourism Council. When demand collapses at such a massive scale, advertiser budgets—especially those for campaigns focused on awareness—get cut.

How are disruptions to shipping routes and airspace in the Middle East affecting freight costs and the flow of goods?

Disruptions in the Strait of Hormuz and regional airspace are making global trade more expensive and more complicated. Rerouted vessels are taking longer paths, while airspace closures are forcing cargo flights to detour or suspend service, leading to longer transit times, tighter capacity, and higher freight rates.

Insurance premiums and security-related surcharges are also rising. The impact is already visible as shipments of garments for Zara owner Inditex, along with other apparel retailers, were stranded as flights across the Middle East were canceled.

These disruptions are constraining the flow of critical goods—energy, fertilizer, and other key inputs—raising the risk of bottlenecks across supply chains. In the short term, that’s likely to show up as assortment gaps and substitutions.

Over time, the conflict will drive companies to rethink sourcing and product mix as persistent volatility in costs and inputs leads to more fragmented assortments.

How are supply chain pressures reshaping business sourcing, inventory strategies, and downstream costs for companies and consumers?

Supply chain disruptions are pushing companies to prioritize resiliency over efficiency. Shortages and price swings in energy-linked inputs, chemicals, and fertilizers are driving up production costs, while logistics providers are adding surcharges and, in some cases, invoking force majeure to manage risk. In response, businesses are diversifying their suppliers, holding more inventory, and building extra cushion into lead times, even if it ties up more capital.

Those adjustments are beginning to flow through the system, leading to higher prices for consumers and tighter margins for retailers, particularly for companies without strong pricing power.

How are MEA social media creators responding to the war?

There is no single, uniform response to the war from MEA creators. Responses are distinct and shaped by personal experiences. A segment of Gulf-based creators, particularly in the UAE, are featuring content that emphasizes calm, safety, and normal life. Emirati creator Khalid Al Ameri highlighted leaders walking publicly in Dubai to signal safety and offer reassurance; he also scrutinized alarmist responses from international coverage.

But the “everything is fine” narrative is not universal. Other influencers have acted as on-the-ground journalists and news sources, sharing detailed accounts of life amid war. Some have posted clips of missiles lighting up the sky; others have tracked the war through real-time updates.

Restrictions inside Iran mean many Persian voices are coming from creators in the diaspora. These creators are entering the conversation to explain Iran’s complex history for global audiences amid a lack of firsthand voices.

Are ecommerce platforms operational amid outages?

Ecommerce platforms in the region remain partially operational, but functionality has been constrained by outages, cyberattacks, and infrastructure disruption linked to the war. In Iran, connectivity dropped to as low as 4% of normal levels during government-imposed shutdowns, making it harder for online businesses to process orders, update and maintain platforms, or communicate with customers.

The war is also affecting cloud infrastructure in the region. Drone strikes damaged Amazon Web Services (AWS) data centers in the UAE and Bahrain, disrupting some cloud services. That shows how ecommerce platforms relying heavily on regional cloud infrastructure can be vulnerable during major conflicts. Shipping routes through the Strait of Hormuz have been challenged, and some major carriers rerouted or suspended transits in March, increasing delivery times and costs for cross-border ecommerce.